A Wall Street Journal column by Greg Ip argues that stablecoins are no longer just plumbing for crypto markets. They are starting to function as a form of private money. The concern is not limited to trading activity: when issuance and redemption are controlled by companies such as Tether and Circle rather than a central bank, part of the money supply is being shaped outside the traditional monetary system.
The source says the stablecoin market has surpassed $200 billion, while the issuers behind USDT and USDC together hold more than $150 billion in US Treasuries and reverse repos. In that sense, stablecoins resemble what monetary economists have long called “near-money” — instruments that are not official money but are liquid enough to serve payment and transaction functions. Stablecoins add a new feature to that idea: they can move globally on blockchains around the clock without relying on bank settlement rails.
Reserve portfolios tie stablecoin growth to the Treasury market
According to the material, Tether holds about $113 billion in assets, with more than 80% allocated to US Treasuries, reverse repos, and money market funds. For Circle, USDC reserves are also weighted heavily toward Treasuries and cash, at more than 85%. That makes major stablecoin issuers significant buyers in the short-dated US government debt market.
The article also cites Spyros Andreopoulos, who argues that demand for stablecoins is, to a meaningful extent, demand for dollars. Under the framework described for the GENIUS Act, a large share of reserve funds ultimately flows into federal debt. Treasury Secretary Bessent is cited as predicting the sector could reach $2 trillion, a size that could make stablecoin-linked Treasury holdings relevant to the short-end yield curve.
Ip’s core warning is about the absence of a central bank backstop in the stablecoin model. Banks operate with deposit insurance and access to central bank liquidity tools. Stablecoin issuers do not. If redemptions accelerate during a stress event, they may have to liquidate reserves, and that could transmit pressure into short-term funding markets.
The US and EU are building very different rulebooks
The source frames global regulation around two distinct approaches. In the United States, the GENIUS Act has been signed into law by Donald Trump. The design is market-led: issuers must hold highly liquid reserves, including US dollars, insured bank deposits, and Treasuries with remaining maturities of no more than 93 days, while leverage and capital requirements are described as relatively looser.
The European Union’s MiCA framework takes a stricter financial-regulation approach. It separates stablecoins into “asset-referenced tokens” and “e-money tokens” and sets more specific standards for capital, investor protection, reserve segregation, and regular audits. The split is not just technical. It reflects two different views of what stablecoins are: a payment innovation in the US approach, and a possible source of systemic risk in the EU approach.
Taiwan has no dedicated law as stablecoins spread in payments
The article gives special attention to Taiwan. It says Taiwan still lacks a dedicated stablecoin law, even though the central bank has repeatedly taken a cautious line and warned that stablecoins could affect the transmission of monetary policy. A firm timetable for regulation has not been set out.
At the same time, USDT and USDC are already widely used in Taiwan’s over-the-counter market and on crypto exchanges, and the source says they have become settlement tools in some international trade activity. For an economy handling more than $700 billion in annual imports and exports, that creates a policy issue beyond the crypto sector. If businesses and individuals increasingly settle cross-border transactions in dollar-backed stablecoins, the central bank’s grip on observing and steering local currency conditions may be affected indirectly.
The source compares Taiwan with other Asian jurisdictions. Hong Kong has introduced a Stablecoins Ordinance with a licensing regime that requires licensed issuers to maintain a physical office in Hong Kong and keep sufficient liquid reserves. Singapore’s Monetary Authority has placed stablecoins under the Payment Services Act and requires reserve assets for single-currency stablecoins to be held in segregated trust accounts. Taiwan has yet to present a similar structure.
The debate now reaches monetary policy itself
The material says stablecoins have moved well beyond a niche crypto discussion. Within the Federal Reserve’s six key challenges for 2026, the design of a stablecoin regulatory framework is listed alongside interest-rate policy and balance-sheet management. It also points to Tether’s cooperation with the Georgian government on GELT, a lari-linked stablecoin, as an example of how the model could expand beyond dollar-pegged tokens.
If stablecoins start to scale across multiple fiat currencies, the question is no longer only about dollar reach. It becomes a question about monetary sovereignty in a digital setting. That is the sharper point behind Greg Ip’s argument: if a globally transferable digital asset issued by private firms and backed by government debt can operate like money, central banks may need to rethink where their authority begins and where it stops.